Labour pledges 15% procurement target for small business, tax admin review and trimmed Investment Boost
The Labour Party has pledged to set a target directing 15 percent of government contracts to small businesses and start-ups, part of a small business policy package announced on 9 August 2026 that also promises faster invoice payments, lower administrative costs and a slimmed-down version of the coalition government's Investment Boost policy targeted to small businesses only.
Labour finance and economy spokesperson Barbara Edmonds said the government buys around $50 billion of goods and services annually, framing the procurement target as a way to redirect a meaningful slice of that spending toward smaller operators who currently struggle to compete for government work. The party would also break up bigger government contracts into smaller jobs to make work easier to bid for, according to RNZ. RNZ
The package, which Labour has branded its "Small Business Action Plan," would help small businesses get paid sooner, invest more easily, and spend less time on paperwork, according to the party's policy document published 6 August. Labour Party An Instagram announcement two days later promoted the same suite of measures.
Labour also proposed a New Zealand Business Number system so businesses would not have to give the same information to multiple government agencies. The party said this would cut down time spent on paperwork across the board.
Revenue spokesperson Deborah Russell said Labour would review tax administration, including provisional tax, filing requirements and the January and February deadline pile-ups that create cash-flow and compliance pressure for small firms. RNZ
On the Investment Boost policy, Labour said it would retain the coalition government's mechanism but narrow its scope, targeting it to small businesses only rather than the broader application under the current government. RNZ reported the plan on 6 August. RNZ
The procurement target draws on a precedent already operating in the Māori business space. The government's procurement target for Māori businesses was initially set at five percent of contracts and rose to six percent in 2022 due to demand, according to a Labour Party release from September 2024. Labour Party Labour's proposed 15 percent small business target would sit alongside, not replace, that existing Māori procurement target.
Labour leader Chris Hipkins flagged procurement difficulties in an August 2024 speech to Local Government New Zealand, citing figures showing 57 percent of construction businesses were reporting difficulties with procurement and work consent conditions, up from 36 percent the previous year. Labour Party
The broader context here is that Labour is constructing a policy argument that the current procurement system is structurally weighted against small operators. The $50 billion annual government spend Edmonds cited is the anchor: if even a fraction of that is currently concentrated among large providers, a 15 percent small business target represents a material redistribution of contract flow. The Māori procurement target precedent, rising from five to six percent on demand, suggests the mechanism can be adjusted once in operation, though Labour has not specified whether the 15 percent figure would be phased or introduced immediately.
The tax administration review Russell outlined targets a known friction point. Provisional tax and the clustering of filing deadlines in January and February have been recurring complaints from small business and tax practitioner bodies. Labour's framing of a New Zealand Business Number as a single identifier across agencies is a structural fix to duplication, though the party has not yet detailed which agencies would be brought in first or what the implementation timeline would look like.
Narrowing Investment Boost to small businesses only is a departure from the coalition government's broader application. Labour has not specified the eligibility thresholds it would use to define "small business" for either the Investment Boost or the procurement target, which will be a detail the business community and the Treasury will press for.
All of these measures are election commitments and would require legislative or regulatory action to implement. The procurement target in particular would likely need to work through the Government Procurement Rules administered by the Ministry of Business, Innovation and Employment, and the New Zealand Business Number proposal would require cross-agency data-sharing agreements and system integration.
